Message from Secretary General_April 2019

Posted on 09 May 2019

Source: SEAISI

In its April 2019 Short Range Outlook (SRO), the World Steel Association (worldsteel) projected that global steel demand will grow by 1.3% year-on-year to 1,735 million tonnes in 2019 and increase by another 1.0% year-on-year to 1,752 million tonnes in 2020. In comparison, global steel demand in 2018 increased 2.1% year-on-year to 1,712 million tonnes.

worldsteel pointed out that though global steel demand is expected to continue to grow, growth rates will be impacted by the less favourable economic environment. It cited China’s deceleration, a slowing global economy, and uncertainty surrounding trade policies and the political situation in many regions as factors that might affect business confidence and investment.

Most regions in the world are expected to see a slowing down in steel demand growth compared to 2018. The three NAFTA countries, i.e. USA, Canada and Mexico, for example, are expected to see steel demand growth inching down from 1.5% in 2018 to 1.1% in 2019 and 0.8% in 2020, contributed mainly by the waning effect of fiscal stimulus and monetary policy normalisation in the US. The EU will also likely see steel demand growth retreating sharply from 4.3% in 2018 to 0.3% this year mainly on account of deteriorating trade environment and uncertainty over Brexit. However, steel demand in the region is expected to perform better in 2020, with a 1.2% year-on-year growth rate.

The CIS countries will see a slowing down in steel demand growth from 3.5% in 2018 to 1.4% in 2019 and picking up slightly by 1.7% the year after. Steel demand in the Middle East region is projected to register a negative growth rate of -2.6% in 2019 before recovering by 1.2% in 2020. The Central and South America region, on the other hand, is forecast to register a credible year-on-year steel consumption growth rate of 3.6% in 2019 which will further expand by a strong growth rate of 7.5% in 2020.

As for Asia and Oceania, the region is projected to see a modest 1.7% year-on-year increase in steel demand to 1,195 million tonnes in 2019 but demand growth is expected to slow down to only 0.4% in 2020 to 1,200 million tonnes. China, the dominant producer in the region and the world, is expected to see its steel demand inching up 1% year-on-year to 843 million tonnes in 2019, before declining by a similar percentage to 835 million tonnes in 2020. Steel demand growth in China in 2019 is expected to be supported by government stimulus measures but the stimulus effects are expected to subside in 2020.

Among the other major steel producing countries in Asia, South Korea and Japan are both expected to register negative growth rates in steel demand in 2019. Japan’s steel demand is projected to retreat 1.0% year-on-year in 2019 to 64.7 million tonnes while South Korea’s steel demand will decline 0.4% to 53.4 million tonnes in the same year. Japan’s steel demand will continue to decline in 2020, by 0.8% year-on-year to 64.2 million tonnes. South Korea’s steel demand, however, will pick up 1.3% year-on-year to 54.1 million tonnes in 2020.

India, on the other hand, is expected to continue to register strong growth in steel demand, by 7.1% and 7.2% in 2019 and 2020 respectively. The country’s steel demand is projected to reach 102.8 million tonnes in 2019. With that, India will overtake the United States as the second largest steel consuming country in the world.

For ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand and Vietnam), worldsteel expects the region, supported by infrastructure development, to be able to maintain its near-term demand growth potential of between 5% to 6% per annum. Accordingly, the region’s steel demand growth is projected at 5.6% and 5.5% for 2019 and 2020 respectively, making it one of the top preforming regions in the world, in terms of steel consumption year-on-year growth rate, for both the years.

At the upcoming 2019 SEAISI Conference & Exhibition in Bangkok, Thailand, I will provide an in-depth analysis of the steel situation in ASEAN-6 when I present my report on “Performance of the ASEAN Iron and Steel Industry in 2018 and Outlook”. At the same event, representatives from the ten member countries of SEAISI will also provide detailed information on the steel industry situation in their countries when they present their respective Country Reports. Additionally, there will also be presentations on the steel industry situation in China and India.

Make sure you do not miss out on the biggest steel event of the year in this region!